Asos has posted an adjusted pre-tax loss of £87.4 million in the first half of its financial year compared to a profit of £14.8 million a year earlier
In the six months to 28 February, the retailer’s revenue declined by 10% on a constant currency basis to £1.84 billion. Asos attributed the fall to challenging trading conditions and its Driving Change initiatives to improve profitability. These included reducing the number of markdowns, tight control of marketing spend and country-specific proposition changes. The retailer has also reduced the breadth of its assortment as as part of plans to right-size stock.
Asos said the actions have accounted for around 50% of the revenue decline since December, but are driving improving order economics.
Meanwhile UK sales were down 10% year-on-year in the period while sales in Europe were flat. Looking at the US and the rest of the world, sales fell by 7% and 12% respectively.
Giving an update on more current trading, Asos said its second quarter sales momentum has broadly continued into March and April with approximately half of a sales decline driven by the planned Driving Change initiatives. However, adjusted gross profit was broadly flat year-on-year due to the prioritisation of profitability over growth.
